Silent Treatment: How Genentech, Novartis Stifled a Promising Drug
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The Wall Street Journal1 APRIL 5, 2005 Silent Treatment: How Genentech, Novartis Stifled A Promising Drug Biotech Firm Tried to Pursue Peanut-Allergy Injection, But Contract Got in Way Zach Avoids a ‘Kiss of Death’ By DAVID P. HAMILTON NEWPORT NEWS, Va. – For years, the onset of the peanut harvest was enough to send Zach Williams to the hospital. Every fall, Zach’s family would watch peanut dust rise from fields to the south and trigger his allergies, making him labor for air as fluid swelled his tissues and constricted his breathing passages. Some attacks laid him in a hospital bed for weeks, where he wore an oxygen mask as drugs dripped into his veins. Five years ago Zach, then 15 years old, joined a clinical trial of an experimental drug called TNX-901, produced by Tanox Inc., a Houston biotechnology company. Monthly injections of the drug tamed Zach’s runaway immune reactions. For the first time in years, his parents sent him to school without worrying that a peanut exposure might kill him. More than 1.5 million Americans have an allergy to peanuts, and some can die in minutes if accidentally exposed. Food allergies lead to 30,000 emergency-room visits and more than 150 deaths a year, many the result of peanut exposure, says the Food Allergy and Anaphylaxis Network, a nonprofit organization in Fairfax, Va. If further testing had proven successful, TNX-901 might now be nearing approval as the first preventive treatment for these people. Instead, the drug sits on the shelf, abandoned after Tanox’s own corporate partners forced it to end development. The U.S. biotech giant Genentech Inc. and Swiss drug maker Novartis AG insisted that Tanox kill TNX-901 in favor of a Genentech drug called Xolair that has yet to prove effective against peanut allergy. When Tanox refused, its partners took it to court. The ensuing legal fight to kill TNX-901 spanned five years and consumed well over $100 million in legal fees. The battle over TNX-901 highlights a common paradox in the drug business. While companies sell many drugs that help both patients and their bottom lines, they can sometimes also advance their commercial interests by stifling potential medical advances. That may mean postponing in-house projects to prevent competition with a drug the company already sells or demanding a halt to allegedly patent-infringing research at a rival. TNX-901 represents an unusual twist on such cases: Genentech and Novartis, relying on disputed con- tract language, successfully blocked a third, independent company from moving ahead with a promising drug – despite the absence of alternative treatments at the time. The long court record provides a window into the vigor with which big companies can fight to stop a potential breakthrough. “It’s critical that we get that clinical trial . shut down,” a lawyer representing Genentech told a judge in 2000, referring to the TNX-901 trial that Zach later joined. No one knows whether TNX-901 would have ultimately proven successful. Regulatory approval would have required more rigorous testing. In the trial Zach joined, tests in more than 80 people showed that TNX-901 could bolster their tolerance to the equivalent of nine whole peanuts. Those receiving a placebo could tolerate less than half a peanut. Novartis declined to make officials available for comment. Genentech officials cast the fight with Tanox as a straightforward contract dispute, and otherwise declined to comment. Tanox itself, despite its long resistance, ultimately gave up and signed a settlement with Novartis and Genentech in February 2004. The three companies agreed to start testing Xolair as a peanut-allergy treat- ment. In a joint statement to The Wall Street Journal, the three say their current focus on Xolair is “the most 1 rapid and efficient approach” for helping patients. Xolair, approved in 2003 as an asthma treatment, is now in mid-stage human trials for peanut allergy, and those tests may produce data sometime next year. Formal approval by the Food and Drug Administration for use in peanut allergy could take years more. Like other food sensitivities, peanut allergy is growing more common in the U.S., particularly among children. A 2003 study found that the incidence of peanut allergy in children doubled between 1997 and 2002 for reasons no one fully understands. LaDonna Williams knew her son Zach faced a lifetime of allergies almost from the moment he was born red and wheezing in 1985. Tests by Hugh Sampson, an allergy specialist then at Duke University, showed a severe allergy to peanuts. In subsequent years, Zach would keep his distance from outside food to avoid trace amounts of peanut or oil that might cling to utensils or cooking surfaces. When the family ate at a local Italian restaurant, Zach’s mother would bring her own spaghetti and meatballs, ask for a plate and wash it in the bathroom before serving Zach’s meal on it. In 2000 Dr. Sampson, who had moved to Mount Sinai Medical Center in New York, called Ms. Williams with news of a potentially life-changing drug. It was TNX-901, and the Williamses jumped at the chance to enroll Zach in a clinical trial. The odyssey of TNX-901 began with an allergy-prone molecular biologist, Tse-wen Chang, and his wife, Nancy, a fellow scientist. The Taiwanese couple founded Tanox in 1986 and soon embarked on a project to attack allergic inflammation. Their target: an immune-system antibody known as immunoglobulin E, or IgE. Floating through the bloodstream and across mucous membranes, the Y-shaped IgE molecule sweeps up viral and bacterial particles in its outstretched arms, and then docks its tail to a particular immune-system cell. That alerts the body’s defenses, usually triggering sneezing, rashes and watery eyes – the body’s somewhat crude initial attempt to expel invaders. Life-Threatening Reaction Unfortunately, in some people IgE also grabs innocuous substances such as pollen or peanut protein, making the body respond to a nonexistent threat. In some allergies, such as sensitivity to peanuts or penicillin, such reactions can escalate to life-threatening anaphylactic shock. Other researchers had long tried to block IgE with experimental drugs but failed because the drugs themselves triggered allergic reactions. Tse- wen Chang thought Tanox could tailor-make a genetically engineered antibody that would latch onto IgE’s tail, preventing it from docking and setting off an allergic reaction. Tanox scientists created several such antibodies. One was TNX-901. Like many young biotech companies, Tanox was chronically short of cash. Nancy Chang, who handled the company’s business side, looked for a corporate partner and found interest from Genentech and Ciba-Geigy of Switzerland, which later merged with another Swiss company in 1996 to become Novartis. In 1989, Dr. Chang sent data and samples of an early anti-IgE antibody to Genentech, but talks with Genentech foundered. Tanox then signed a partnership with Ciba in mid-1990. Worried that the anti-IgE project might stall in Ciba’s bureaucracy, Tanox negotiated a provision allowing it to move ahead with any antibody candidate that Ciba rejected. A few years later, Genentech unveiled its own anti-IgE program, one that Dr. Chang says she considered suspiciously familiar. Tanox filed suit in Harris County district court in December 1993 accusing Genen- tech of misappropriating its work. The case dragged on into 1996, and Tanox officials began to fear that Genentech was outgunning them in the development race. Eventually, the three companies reached a deal. Genentech, Ciba (soon to be renamed Novartis) and Tanox would combine their anti-IgE programs. Genentech and Ciba would take the lead in testing, manu- facturing and selling any resulting drugs. Tanox, meanwhile, licensed its anti-IgE patents to the partnership in exchange for royalties and other rights. The deal explicitly incorporated the 1990 Ciba-Tanox pact – but, significantly, it failed to clarify whether Tanox still had the right to independently develop any anti-IgE drug rejected by the bigger partners. 2 The two big companies quickly chose Genentech’s anti-IgE antibody — the future Xolair — as the partnership’s lead candidate. TNX-901 was relegated to backup status. Tanox executives began to get frustrated when the bigger partners insisted on testing Xolair solely as an asthma and hay-fever treatment, says David Anderson, a former Tanox vice president. Tanox wanted to go after food allergies, too. In mid-1997, Tanox told Genentech and Novartis that it would assert its rights to study TNX-901 in medical conditions the collaboration wasn’t addressing. Back to Court Tanox argued that Genentech and Novartis had effectively rejected TNX-901 — triggering the old clause that said Tanox could research such drugs on its own. Not so, said the two big companies. They maintained that all anti-IgE drugs identified before the formation of the three-way collaboration belonged to the partnership, whether or not it was actively working on them. In April 1999, Genentech and Novartis sued Tanox in federal district court and demanded that it stop working on TNX-901. Tanox refused, and soon after started the clinical tests of TNX-901 that involved Dr. Sampson and Zach Williams. Zach joined the trial in October 2000. Several months later, a test revealed that his tolerance had risen substantially, apparently thanks to TNX-901. Zach’s reactions to the dust from peanut harvests ceased. When he accidentally ate some jelly beans made in a factory that also processed peanuts, he didn’t feel a thing. For Ms. Williams, a 15-year burden lifted. She was no longer plagued by the fear that an unsuspecting girl would eat a peanut-butter candy, then grab her attractive son and plant a kiss on his lips.